Sage rejects Biogen takeover and launches review

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nope written on wood
Daniel Herron

The board of Sage Therapeutics unanimously rejected Biogen's acquisition offer of around $469 million, saying it "significantly undervalues" the company.

That's not surprising – Sage filed a lawsuit just a few days ago to block the bid, after all – but the update also reveals that Sage has embarked on a strategic review to explore multiple options for the business, including "a potential strategic transaction, business combination, or sale."

In the update, Sage's board added the company has not given a timetable for that strategic review and stressed there is no certainty that it will result in a change of direction, which for now is to focus on the commercialisation of its post-partum depression (PPD) therapy Zurzuvae (zuranolone).

Biogen – which has a longstanding alliance in place with Sage and co-markets Zurzuvae – offered to buy the approximately 90% of shares in Sage that it doesn't already own for $7.22 apiece earlier this month.

That bid has, however, been viewed as opportunistic by some analysts, given that Sage's share price has lost more than 90% of its value over the last couple of years due to a string of regulatory and pipeline setbacks.

Once tipped as a blockbuster, Zurzuvae made sales of $49 million in the first nine months of last year, following its launch for PPD in the US towards the end of 2023, and its commercial prospects have been decimated by the FDA's decision not to approve the drug in the much larger major depressive disorder (MDD) indication.

Since then, Biogen decided to opt out of their partnership on essential tremor candidate SAGE-324 after disappointing results in the mid-stage KINETIC 2 study, while Sage has reported failed phase 2 trials of dalzanemdor in Alzheimer's, Parkinson's, and Huntington's disease.

That has left the company with a speculative programme looking at the role of SAGE-324 as a potential treatment for seizures associated with developmental and epileptic encephalopathies, and early-stage candidate SAGE-319 for behavioural symptoms associated with neurodevelopmental disorders.

That said, the company is still fairly well financed with a cash position of $569 million at the end of the third quarter of 2024, particularly after making sweeping job cuts to reduce costs.

Shares in Sage closed up nearly 5% after it issued its statement, but lost most of those gains in after-hours trading.

Photo by Daniel Herron on Unsplash